A new bill called the Responsible Homeowners has been introduced in Congress for the purpose of simplifying the process of changing mortgage providers by eliminating some of the closing costs, such as home appraisal costs under HARP 2 programs.
Another major modification involves credit standards. This Act, the Responsible Homeowner Refinancing Act would no longer consider income and employment verifications in the approval process. It is based on the current HARP requirement, which is that homeowners who refinance must have good payment history. This Bill asserts that good payment history alone is sufficient to determine eligibility and payment capability without further verifications, regardless of whether the homeowner, is employed, unemployed or retired, and what source of income they may have, if any.
In this regard the Act mimics FHA's policy under its FHA Streamline Refinance program and VA's standards for its Interest Rate Reduction Refinance Loan (IRRRL) program.
Finally, the Bill requires Fannie Mae and Freddie Mac to establish alternate home appraisals, which will cost less than a full appraisal and not require home visits. Both of these two government mortgage entities already use automated appraisals to establish home values within specified, reasonable ranges.
The Responsible Homeowner Refinancing Act of 2017 would benefit eligible homeowners who have:
- Mortgages presently owned or guaranteed by Fannie Mae or Freddie Mac
- Mortgage securitized by Fannie Mae or Freddie Mac on or before May 31, 20016
- Mortgages that have not been previously refinanced via HARP. There is an exception for Fannie Mae loans refinanced under HARP between March and May 2016
- Mortgages with a loan-to-value ratios of 80% or greater
- Mortgage which are current and which have perfect payment histories for the last 6 months
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